James Hughes | Jan 11, 2019 10:53
US index futures have Wall Street pointing to a relatively flat start to Friday’s session, following some significant gains earlier in the week. Yet more dovish tones from the Fed yesterday helped drive further buying of US stocks, with investors willing to overlook not only the fact we’ve had no meaningful update from those Chinese trade talks, but also the deteriorating situation regarding the US government shut down.
With neither side showing any desire to yield ground, Federal workers are set to go unpaid and this has the potential to start trickling down into the economy as consumer spending decisions are put on hold.
December’s US inflation data due shortly ahead of the opening bell will be closely followed. Any undershoot of the forecast 1.9% would be used as ammunition to argue that the Federal Reserve may have overstepped the mark with four rate hikes last year, and although this could arguably lend support to stocks, the bigger concern will be how the January print then maps out, given the worsening economic backdrop.
Economies are cyclical and the post credit crunch rally is increasingly looking as if it has run its course.
Written By: James Hughes
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